Rental Housing Investment Act
- Bill Number
- H.R. 8996
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2026-05-21: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-06-10T08:08:02Z
AI-Generated Summary
Purpose This legislation aims to encourage investment in long-term residential rental housing by amending the Internal Revenue Code of 1986 to allow a special depreciation deduction for qualifying properties.
Key Provisions
- Creates a new subsection in tax law (Section 168(o)) offering bonus depreciation for long-term residential rental property.
- The deduction equals the lesser of $150,000 per dwelling unit or 100 percent of the property's adjusted basis (excluding land).
- For properties that also qualify as affordable housing under existing low-income housing tax credit rules, the per-unit amount increases to $250,000.
- Requires an irrevocable election by the taxpayer to claim the benefit, with the original use beginning with that taxpayer.
- Includes recapture rules: if the property stops being used as residential rental housing within 10 years (or 15 years for affordable projects), prior deductions must be repaid, with adjustments to basis.
- Allows the deduction when computing alternative minimum tax without certain adjustments.
- Applies only to property placed in service in the United States after 12 months from the date the law is enacted.
Significant Changes to Existing Law
- Introduces a new targeted bonus depreciation allowance specifically for multi-unit residential rental properties, which did not previously exist under Section 168.
- Expands the definition of Section 1245 property to include this new category, affecting how gains are treated upon disposition.
- Modifies recapture and basis adjustment rules for a 10- or 15-year compliance period tied to continued rental use.
Potential Impacts
- On government agencies: The Internal Revenue Service would administer the new election process, issue guidance, and handle compliance certifications for affordable housing requirements.
- On citizens: Could increase the supply of rental housing by reducing upfront tax costs for developers and owners, potentially affecting housing availability and rental markets.
- On international relations: No direct effects identified in the legislation.
Main Stakeholders Affected
- Real estate developers and owners of multi-unit residential rental properties.
- Providers of affordable housing projects.
- Taxpayers claiming the depreciation deduction.
- The Internal Revenue Service for enforcement and guidance.
Notable Legal, Constitutional, or Political Implications
- Operates entirely within existing tax depreciation frameworks but adds new incentives and compliance conditions.
- Raises no apparent constitutional issues, as it involves standard congressional authority over taxation.
- Creates a voluntary election mechanism that cannot be revoked without agency consent, except in limited circumstances.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Sánchez, Linda T. [D-CA-38]
Cosponsors (4)
Rep. Tenney, Claudia [R-NY-24], Rep. Panetta, Jimmy [D-CA-19], Rep. LaHood, Darin [R-IL-16], Rep. Latimer, George [D-NY-16]
Recent Actions
- 2026-05-21: Referred to the House Committee on Ways and Means.
- 2026-05-21: Introduced in House
- 2026-05-21: Introduced in House
Bill Versions
- Rental Housing Investment Act — issued 2026-05-21 — PDF (7 pages)